Successful Partnerships as Key Ingredient for Driving Growth in the Food Industry

June 28, 2012

Companies in the food sector are putting more energy into partnerships, explained John Mennel of

Deloitte during a session on “Partnerships: A Critical Success Factor for Expanding Markets” at the 2012

Cracking the Nut conference in Washington, DC. This year’s conference focused heavily on private sector

involvement in financing agribusiness in developing countries. A large part of making finance work for

smallholder farmers is the cooperative efforts between the public and private sectors.

Deloitte conducted a series of interviews with companies in the food sector to get a better sense of how

they are using global partnerships to not only promote growth in emerging markets, but drive their own

business strategies. In fact, what Deloitte calls “strategic social partnerships” (SSPs) are not emanating

from companies’ corporate social responsibility units but directly from its operations. During the

opening presentation, Mennel listed six leading practices that emerged from the Deloitte interviews:

1. Strategy – Companies are focusing on SSPs in a limited number of areas directly related to their

core business goals.

2. Organization – A partnership culture is institutionalized throughout the company.

3. Business Cycle – SSPs are used specifically to enter new markets, drive growth, and manage risk.

4. Structure – Strong governance in the structure of partnerships is more sophisticated and

growing in importance.

5. Branding – Marketing departments are leveraging SSPs as a way of reinforcing a company’s

brand.

6. Measurement – Collecting evidence on investment, impact and business value is a central

function of SSP engagement.

After the overview of the key themes that emerged from the Deloitte interviews, representatives from

Unilever and Dole’s Dalé Foundation gave concrete examples of how their respective firms are engaging

in SSPs. Through its sustainable living plan that is part of its corporate strategy, Unilever is building

longer term partnerships with suppliers by crafting joint business plans. Dalé is creating social programs

in the banana industry in both Ecuador and Peru that benefit grower workers and their families.

Unilever’s Dr. Christof Walter and Dalé’s Maria Eugenia Castro both said that their organizations decide

to partner to fill gaps in particular competencies and to demonstrate credibility. For example, companies

can bring access to markets while NGOs can contribute technical expertise. When discussing how

companies integrate SSPs into their business strategy, Nestle’s model was used as an example. Nestle

operates a “shared value board” with members from both inside and outside the firm. This board is

charged with generating ideas for SSPs which are then reconciled with individual business units. Viable

strategies are then approved and implemented by senior board members.

The panel acknowledged there is still a lot the private and public sectors can learn from each other. They

acknowledged that building successful SSPs is hard work and expectations have to be realistic about

how much time it takes. Of the companies Deloitte interviewed, almost none said they felt like they

were getting measurement right. Issues such as whether to align the data collection period with

business cycles or some other longer time marker has made the measurement framework challenging.

However, despite remaining challenges, companies in the food industry are seeing the business value in

SSPs and are putting in the investment to forge long-term, impactful relationships.

A large part of the discussion focused on what a successful partnership looks like. From this discussion, a

number of factors were identified:

Three characteristics are absolutely essential: truth, transparency, and authenticity.

Savvy companies do not start out with the intention to develop communities, but commit

themselves to understanding how its way of doing business impacts particular communities.

It’s critical for businesses to be very clear with their potential partners what each organization’s

objectives are and what agendas they bring to the table.

A clear roadmap for the partnership is needed at the very beginning of the relationship.

The partnership should have the right level of support within the organization.

Not every organization makes a good partner. A company needs to be very clear and honest

about who it accepts as a partner and why.